Realty firms take their brands global with projects in Sri Lanka, Africa and Europe to spread risk

MUMBAI: During the slowdown last year, sales at luxury home builders EMGEE Group had gone down so much that Mudhit Gupta, the company's chairman, could actually keep a count of the footfalls at his sales offices.

It was during those days that he got a call from a friend in the UK who told him about real estate opportunities in Spain and Montenegro. "I landed there, saw some beautiful sites, met extremely FDI-friendly governments, and decided to invest," he says.

Gupta, 41, is now building 240 beachside luxury apartments and 22 villas in Montenegro, a tiny east European country with breathtaking beaches — just the kind of place where well-heeled Russians, Uzbeks, Brits and Indians troop in during the winter.

Gupta, who will begin marketing the project in about two months, is hoping that Russians and Uzbeks will buy more than three-quarter of these homes. Rich British and Indians will buy the rest.

"I can spread my risks that way. And I can also establish myself as a niche global luxury player," says the Mumbai-based builder. Montenegro, whose economy is untouched by the current slowdown, is easily accessible by flight from Russia and India — there are direct flights from Russia and from India you can get there in 10 hours, as long as it takes one to reach London, with a changeover in Istanbul or Vienna. And in both these countries, the number of HNIs who want asecond home abroad is on the rise.

Increasingly, more and more Indian builders are looking to build projects overseas. The tallest residential building in the world has been built in Dubai by the Mumbai-based Hiranandani Group. The tallest building in Sri Lanka is being constructed by a consortium of Kolkata-based real estate builders through a subsidiary called Ind cean.

Even India's biggest private sector firm, Reliance Industries, has stepped on the gas in the African real estate market through a tie-up with Jaydev Mody, an NRI businessman with huge real estate interest in Africa, who also runs casinos in Goa.

Mody was in Sri Lanka for his casino business and could not take calls, but sources close to him said that Reliance Industries has set up a joint venture with Mody's Delta Corp that acquired nine plots of land in Nairobi for commercial and residential development. The company, in which Reliance has a 60% shareholding, has invested Rs 200 crore for the plots.

"This is just the beginning. Watch out for more," the source, who did not want to be named said, pointing to the huge growth potential in Africa where land prices are very low compared to other parts of the world. Value of real estate is going up in Sri Lanka after peace is restored in that country around a year ago, and a Kolkata-based consortium of builders has seized the opportunity.

South City Projects has formed a special subsidiary, Indocean Developers, to develop Sri Lanka's tallest tower at a height of 200 metres. This will be part of a mixed-use development in Colombo and the company will be investing around Rs 500 crore over the next four years in the project, says Pradeep Sureka, director at South City.

"We have been looking to venture outside Bengal for some time now. Sri Lanka offered a good opportunity. The government was pro active and real estate market buoyant." South City is a consortium of six Kolkata-based real estate companies — Merlin Group, Shrachi, Rameswara Group, Emami Group, JB Group and Sureka Group.

"With peace restored in Sri Lanka, alot of people are looking to return home. We see an opportunity here," Sureka adds. The Mumbai-based Hiranandani Group launched the world's tallest all-residential tower 23 Marina, a 395-metre structure in Dubai, which is expected to be handed over to buyers next month. Darshan Hiranandani, director at the group, says that it is easier to work in other countries because of the faster pace of execution, which keeps a check on costs.

"Constructing this 90-storey tower in Dubai took us five and a half years. The same project would have taken us at least ten years in Mumbai. The government there took care of issues like policy and infrastructure." In Hiranandani's project — 23 Marina — a third of the buyers are Indians based in the Middle East. There are buyers from India as well.

In recent times, a number of wealth managers are advising their high net worth clients on real estate investments outside India, looking at the opportunity in many markets like the US and UK where real estate prices have dropped considerably over the past few years.